SERVICE TAX ON REIMBURSEMENT OF ELECTRICITY CHARGES

[SUMEDH AYARE]

I AM A SERVICE RECEIVER. 

WE HAVE TAKEN NEW OFFICE & B.E.S.T IS ISSING ELECTRICITY BILL IN FAVOUR OF XYZ  &  XYZ IN TURN ISSUES BILL IN OUR FAVOUR BY CHARGING SERVICE TAX. (SINCE THE METER IS NOT IN OUR NAME - IT WILL TAKE SOME TIME)

WHETHER I AM LIABLE TO PAY SERVICE TAX ON REIMBURSEMENT OF ELECTRICITY CHARGES TO XYZ.

AI Summary

Service tax on reimbursements: bona fide pass-through electricity reimbursements without mark-up are not taxable.
Reimbursements of electricity charges that are bona fide pass-through recoveries of actual expenditure, made without mark-up or separate service element, are not subject to service tax; therefore a recipient reimbursing electricity billed in a third party's name need not pay service tax on such actual reimbursements, subject to factual verification.